Your Credit Union Can Help You in Business

Have you decided to become your own boss? Or do you already have your own small business?

Tossed about by shifting economic forces, many people think they can do better in business for themselves rather than face the risk of future corporate downsizing. Some have special considerations regarding life changes and work schedules, or hope to supplement their spouse's income. Others are natural born entrepreneurs with special talents or unique ideas.

Whatever your situation, your credit union can be a valuable source for helpful business advice, products, and services.

Getting off on the right foot
An estimated four out of five businesses fail. That's why it's important to get the best start. See if your credit union can give you guidance on beginning basics such as researching and drawing up a small-business plan. Many credit unions have reciprocal relationships with local secondary education facilities.

On another track, some credit unions sponsor joint seminars with local firms. They also encourage networking among fellow credit union members who already have small businesses or home-based offices. These more experienced members volunteer to mentor start-up business owners.

Credit unions often give a small business owner a chance when larger financial institutions turn away.

"Our observation is that SOHO [small office/home office] owners think they need to be experts at everything and are sometimes afraid to admit their deficiencies," says Larry Accola, senior vice president in charge of business loans and services for Royal Credit Union in Eau Claire, Wis. "We tell SOHO owners that they need to surround themselves with a team of capable people, including at a minimum, an accountant, a lawyer, an insurance professional, and a financial [services] provider. This allows them to spend more time running their businesses." Along these lines to help small business owners, the credit union jointly sponsors one-hour seminars with local CPA (certified public accountant) firms several times a year.

In New York, Nicole (Nickie) Carrier-Titti, is an example of a determined woman who, with the aid of her credit union, went from the brink of death to owning her own business. After her car was crushed by a 52-ton truck carrying highway salt five years ago, she had to undergo surgery and extensive therapy to regain movement skills.

Although she was able to eventually walk and do basic movements, she found it impossible to hold down a traditional job because of physical complications that caused constant fatigue and made even taking pain medication very difficult.

Through a four-week extension course on starting a small business, she met the business loan officer for Alternatives Federal Credit Union in Ithaca, N.Y. She enrolled in the credit union's Community Enterprise Opportunities (CEO) program. The program taught her everything from market research to business planning. It also gave her the encouragement to find a business mentor, get community input as to the best business location, and develop brochures to explain her programs. She hired part-time staff and structured her work schedule and environment to accommodate her physical limitations.

Using your credit union more
If you have a business already, your credit union may be able to provide you with a business checking/share draft account, business savings account, merchant processing, investment services, IRAs (individual retirement accounts) and 401(k) plans, additional insurance, and small-business loans. It's well worth it to ask if your credit union has any of these—particularly if your business accounts are at separate financial institutions and causing you to spend a lot of time running around. Remember, you want to spend time running your business—not duplicating chores.

Often, these credit union services are available whenever you need them through secured online banking via the credit union's Web site, 24-hour touch-tone phone, and member service call centers.

Credit unions often give a small business owner a chance when larger financial institutions turn away. That proved to be the case with George Collingwood, owner of Clayton's Candies in Eugene, Ore., who has been selling sweet confections since 1987.

You want to spend time running your business—not duplicating chores.

Like other small entrepreneurs, Collingwood enjoys both the freedom and responsibility that owning a small business provides. "I have the flexibility to schedule projects in advance as well as schedule in other things that might prove interesting or enjoyable," he says. He sells candy from his booth at Eugene's famous Saturday Market, making $200 to $300 a day. To supplement this income, Collingwood sells candy at events throughout the state and at the annual county fair, which can provide him with $7,500 to $8,000 in sales over a four-day period. One day, he sold a record 250 pounds of fudge, garnering $2,500.

Largely because of the Saturday market's origins, a "hippie" image often is associated with its vendors. For this reason, Collingwood found that other local financial institutions were unwilling to lend to him. By contrast, O.U.R. credit union has been very understanding and helpful. "My credit union helps me with loans for cooking supplies and ingredients before the big shows, when I have to make large amounts of candy in advance," says Collingwood.

Collingwood is grateful for the credit union's belief in his potential as a businessman while at the same time helping him achieve his life goals—like owning his own home.

Next to saving time and receiving better customer service, another advantage to having both your personal and business accounts with your credit union is that both types of accounts can contribute to securing future loans and services. A good personal credit record can help toward securing a business loan. Likewise, a history of repaying business loans can help build a good credit record for obtaining a house mortgage. The credit union also can advise you about how to build capital in your business or use profits toward a retirement plan for you and your employees.

So next time you're in your credit union, ask what resources it offers to keep your business dream going strong.

Published April 7, 2003